The Peconic Bay Community Preservation Fund produced nearly 22 percent less revenue in the first two months of 2017 than it did during the same period in 2016, highlighting the decrease in real estate sale revenue on the South Fork, Assemb. Fred Thiele Jr. said.
The fund — which is generated from a 2 percent tax on real estate transactions in the five East End towns of East Hampton, Riverhead, Shelter Island, Southampton and Southold — took in $14.77 million in January and February, down from $18.89 million at the same point last year, Thiele (I-Sag Harbor) said.
East Hampton saw the starkest drop in revenues for the fund — which is used to preserve open space and improve water quality — with a 44 percent decrease in January and February. The town produced $3.98 million in fund revenue, down from $7.12 million at the same time last year.
“It doesn’t take a lot of transactions to turn those numbers around in a community like ours, where you can have one sale for 25 or 50 million dollars,” East Hampton Supervisor Larry Cantwell said. “It’s hard to really draw a conclusion based on two months of data.”
The revenue decline was most pronounced on the South Fork, Thiele said. Southampton took in 10.3 percent less revenue in January and February, down from $9.97 million to $8.94 million. Shelter Island saw a 5 percent dip, from $200,000 to $190,000.
Judi Desiderio, chief executive of Town & Country Real Estate, said the declining fund revenues do not mean there are fewer home sales in the Hamptons. Instead, they reflect higher demand for homes selling for less than $5 million.
“In the Hamptons, we’re a luxury item,” Desiderio said. “If you take a look at what happened on Wall Street, there was a pullback, and that makes people take pause.”
The North Fork has experienced a rise in fund revenues so far this year. Southold took in $1.13 million, 2.7 percent more than in the first two months of 2016. Riverhead generated $540,000, 8 percent more revenue than the $500,000 it produced during January and February 2016.
“The price points are much lower than the South Fork, and so the entry level [is] easier,” Desiderio said of North Fork real estate. “And some people got tired of the South Fork traffic.”
The Community Preservation Fund has generated $1.202 billion since its inception in 1999, Thiele said. For first-time home buyers in East Hampton, Southampton and Shelter Island, the first $250,000 is exempt from the fund tax. In Riverhead and Southold, that figure is $150,000.
East Hampton officials said they could adjust the preservation fund program budget for next year if needed, but noted that they do not base it on the highest or lowest revenues generated.
“One transaction can change everything, at least in this type of real estate market,” Councilwoman Sylvia Overby said.